Jaishankar in Moscow: India Pushes to Fix $58.9 Billion Trade Deficit with Russia as U.S. Tariff Pressures Mount
India's External Affairs Minister S. Jaishankar arrived in Moscow this week for high-level engagements aimed at recalibrating India-Russia economic ties, as both nations navigate a shifting global order marked by Western sanctions, U.S. tariff pressures, and deepening energy interdependence.
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Addressing the India-Russia Inter-Governmental Commission for Trade, Economic, Scientific, Technological and Cultural Cooperation (IRIGC-TEC) alongside Russia’s First Deputy Prime Minister Denis Manturov, Jaishankar described the gap as a “serious concern” requiring urgent solutions.
“We need to address this imbalance by diversifying trade, removing bottlenecks, and finalising the India–Eurasian Economic Union free trade agreement at the earliest,” Jaishankar said, outlining measures ranging from tariff adjustments to expanding rupee-rouble financial channels.
He added that improving logistics through the International North-South Transport Corridor, the Chennai–Vladivostok maritime link, and the Northern Sea Route could significantly reduce costs and stimulate exports.
India and Russia have set an ambitious goal of reaching $100 billion in bilateral trade by 2030. Jaishankar argued that more balanced growth, rather than oil dependency, is key to achieving that target.
Moscow’s Response: Sanctions-Proof Systems
For Russia, the emphasis lies not just on trade volumes but on insulating economic channels from Western pressure.
In a statement issued ahead of Jaishankar’s meeting with Foreign Minister Sergey Lavrov, the Russian foreign ministry underscored the importance of building transportation, logistics, and banking systems “independent from countries imposing sanctions.”
The push includes expanded use of national currencies in settlements and greater reliance on bilateral payment mechanisms -- a trend already visible in the rise of rupee-rouble transactions.
Russian Deputy Trade Representative Evgeny Griva said cooperation in this sphere had accelerated since Washington tightened scrutiny on Russia’s financial networks.
My opening remarks at the 26th Session of the India-Russia Intergovernmental Commission on Trade, Economic, Scientific, Technical and Cultural cooperation in Moscow.
— Dr. S. Jaishankar (@DrSJaishankar) August 20, 2025
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“We see that after such pressure, there is an increase in cooperation,” Griva noted. “Payments in ruble-rupee have become safer. More pressure only deepens our financial cooperation.”
Oil Politics and U.S. Pressure
India’s oil purchases remain central to the equation. Since 2022, Russian barrels have offered India significant price advantages amid volatile global markets. But that dependence has also exposed New Delhi to diplomatic headwinds.
Earlier this month, U.S. President Donald Trump announced fresh tariffs on Indian goods, raising duties to 50%, citing India’s continued imports of Russian oil. Washington has warned that New Delhi’s energy trade undermines collective sanctions against Moscow.
Moscow has pushed back sharply. Roman Babushkin, Russia’s Charge d’Affaires in New Delhi, dismissed the U.S. measures as “unjustified, unlawful, and neocolonial.”
At a press briefing, he argued that pressuring India to abandon Russian oil would destabilise markets and threaten the energy security of developing economies.
“Russia is the largest producer of oil and India is the largest consumer. Any unilateral action leads to disruption of supply chains and destabilisation of global markets,” Babushkin said. “Friends don’t behave like that.”
Griva confirmed that Russia had negotiated mechanisms to ensure uninterrupted supplies to India regardless of external sanctions.
He also disclosed that Moscow was offering New Delhi discounts of around 5% on crude, subject to commercial negotiations, reinforcing Russia’s role as India’s most competitive energy supplier.
Opening Russian Markets to Indian Goods
Beyond energy, Moscow has sought to offset criticism of the imbalance by inviting Indian exporters into its domestic markets.
With Indian goods facing difficulties in the United States amid tariff hikes, Babushkin suggested Russia could serve as an alternative destination.
“If Indian goods are facing restrictions in the U.S., the Russian market is open to them,” he said, stressing Moscow’s readiness to absorb more agricultural, pharmaceutical, and manufactured products from India.
Griva added that Indian exports to Russia had already been growing “bigger and faster” than before, with bilateral trade showing stable annual growth rates of around 10%.
Strategic Layer: Beyond Economics
The trade dialogue comes against the backdrop of heightened geopolitical coordination. Just days before Jaishankar’s arrival in Moscow, Prime Minister Narendra Modi held a phone call with President Vladimir Putin.
The Russian leader briefed Modi on his meeting with U.S. President Donald Trump in Alaska, a high-profile summit that reignited hopes for progress toward a negotiated settlement of the war in Ukraine.
India has consistently advocated for dialogue and diplomacy in resolving the conflict, a position it reiterated following the Modi-Putin call. Russia, in turn, has emphasised India’s importance as a trusted partner in navigating global tensions.
“The recent phone call by President Putin to Prime Minister Modi shows that India matters a lot to Russia,” Babushkin said.
“Our partnership is strategic and resilient, and whatever challenges arise, we are committed to finding solutions together.”
Lavrov is expected to brief Jaishankar on developments from the Alaska summit during their meeting on Thursday, where discussions will also cover transport, energy, agriculture, and scientific cooperation.
BRICS and Multilateral Counterweights
Another recurring theme in Moscow’s messaging is the role of BRICS as a counterweight to Western-led sanctions regimes.
Russian officials highlighted that no BRICS member had ever imposed punitive measures on another, presenting the grouping as a platform of stability.
“Non-UN sanctions and secondary sanctions are illegal. They weaponise the economy,” Babushkin said.
“Despite the tremendous pressure, the Russian economy continues to grow. You cannot exclude such a big and important country from the global system.”
Speaking at the India-Russia Business Forum in Moscow.
— Dr. S. Jaishankar (@DrSJaishankar) August 20, 2025
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For New Delhi, BRICS and other multilateral frameworks offer an avenue to strengthen ties with Moscow without appearing isolated from its Western partners.
At the same time, India must balance these engagements with its exposure to U.S. markets, where protectionist tariffs now loom large.
The proposed India–Eurasian Economic Union free trade agreement, expanded connectivity corridors, and currency-based payment systems could all form part of that framework.
But much will depend on whether both sides can translate strategic intent into practical outcomes that narrow the trade imbalance without triggering fresh waves of external pressure.
As Jaishankar put it in Moscow, “The foundations of our partnership are mutual trust and respect. What we need now is to turn that trust into trade flows that are more balanced, sustainable, and beneficial to both our economies.”